China Unicom and China Telecom forms Strategic Partnership to Strengthen their LTE Business

Chang Xiaobing_chairman_China Telecom

China Unicom and China Telecom have signed an agreement to share resources in their attempt to compete with market leader China Mobile. The partnership is focused on boosting their 4G business in the China’s fast growing 4G LTE market.

 

The partnership is set to cover network sharing of LTE equipment in rural markets; the backing of a six-mode handset as a national standard for high-end mobile devices; joint negotiations on international roaming rates; pooling resources to improve network quality and customer experience; and the development of new ventures targeting market growth. The deal is also set to involve joint financial backing, though the exact amount has not been released.

 

In a statement published on their websites, the operators said the multi-faceted arrangement would help to reduce costs and provide better networks and services to customers.

 

In November 2015, China Mobile had more than 825 million subscribers out of which about 287 million were on 4. Neither China Unicom nor China Telecom provides detail on their 4G customers. In November 2015, China Unicom served nearly 287 million mobile customers, 180 million of whom were using 3G or 4G services. However, the carrier has been consistently losing subscribers over the past several months. In November 2015, China Telecom served 197 million total customers, including 141 million on its 3G and 4G networks.

 

All three players last October *have also announced plans to transfer* of 231 billion yuan ($36 billion) worth of telecommunications towers and related assets to their China Tower joint venture. The three operators formally agreed to create the new company in July 2014, with the main goal of reducing duplication of telecom towers and other related infrastructure. China Tower will be responsible for the construction, maintenance and operation of telecom towers across the country.

 

China Mobile owns a 38% stake in the joint venture while China Unicom and China Telecom will have 28.1% and 27.9% respectively. The remaining 6% will belong to state-owned China Reform Holdings. China Mobile said it will transfer assets worth 116.4 billion yuan to China Tower, while China Unicom and China Telecom will transfer assets worth 63.2 billion yuan and 34.3 billion yuan, respectively.